How to Form a Single-Member LLC in Ohio

Want to form a single-member LLC (SMLLC) in Ohio? Here's what you need to know.



These are the steps to form a single-member limited liability company (SMLLC) in Ohio.  Remember: For most formation purposes, an Ohio SMLLC is considered the same as a multi-member limited liability company (LLC).

1. Name Your SMLLC

The name of an Ohio SMLLC either must contain the words “limited liability company,” without abbreviation, or one of the following abbreviations: “LLC,” “L.L.C.,” “limited,” “ltd.,” or “ltd.” The SMLLC’s name must be distinguishable on the records of the Ohio Secretary of State (SOS) from the names of other domestic or foreign business entities already registered with the state.

Check to make sure the name you want is available by doing a business name search on the SOS website. For a $39 fee you can reserve a name for 180 days by filing a Name Reservation (Form 534B) with the Ohio Secretary of State.

2. File Articles of Organization

You create an Ohio SMLLC by filing Articles of Organization with the Ohio Secretary of State. To complete the articles you’ll need to provide the official name of your new SMLLC, the name and address of the SMLLC's statutory agent, the agent's signature accepting appointment, and a few other basic details. You can file your articles online or download a blank articles of organization form from the SOS website. The current filing fee is $99.

Every Ohio SMLLC must have a statutory agent (most states call this a registered agent). A statutory agent is an individual or business entity that agrees to accept legal papers on behalf of the SMLLC. The statutory agent can be an individual Ohio resident or a domestic or foreign business entity authorized to do business in Ohio. The statutory agent must have a physical street address in Ohio.

All of the paperwork and procedural steps to start a single-member limited liability company in Ohio can be done online using Nolo's Ohio Online LLC Formation application.

3. Prepare an Operating Agreement

Ohio does not require an SMLLC to have an operating agreement. However, even though an SMLLC has just one member, an operating agreement is highly recommended. An SMLLC operating agreement does not need to be filed with the state.

The operating agreement is usually made between the single member and the LLC itself. The agreement typically covers the member’s rights, duties, and obligations, as well as the SMLLC’s management structure. Having an agreement in place can help with liability protection by separating your business from you personally. It also can be useful with lenders and other businesses when entering into business transactions.

In most states, if you don’t state that your SMLLC will be manager-managed when you first register with the state, then your SMLLC will be treated by default as member-managed. The distinction between member-managed and manager-managed can be important so be sure to consider both options before you decide which type of management structure you want for your SMLLC.

For more information and help creating an SMLLC operating agreement, see Nolo's Guide to Single-Member LLCs, by David M. Steingold (Nolo), or use Nolo’s Online LLC.

4. Do You Need an EIN?

An SMLLC that keeps its default tax status of disregarded entity (same as a sole proprietorship) and does not have employees is not required to obtain a federal Employer Identification Number (EIN). Instead, owners of these SMLLCs can report their business profits and losses on their personal tax returns using their own Social Security number or tax identification number.

If your SMLLC has employees or if you choose to have your SMLLC taxed as a corporation rather than as a disregarded entity, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN for your SMLLC, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. In many cases it makes sense to obtain an EIN for your SMLLC even if it is not required for federal tax purposes.

You can get an EIN by completing an online application on the IRS website. There is no filing fee.

5. Register With the Department of Taxation

In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with the Ohio Department of Taxation (DOT). For most tax purposes, you can register online through the Ohio Business Gateway (OBG) or by mail using the correct form (check the OBG site for details). Ohio also has a Commercial Activity Tax that applies to most Ohio business entities including SMLLCs. For more information on state LLC tax registration, see Nolo's article LLC Annual Report and Tax Filing Requirements: A 50-State Guide.

6. Obtain Business Licenses

Depending on what kind of business you’re running and where it’s located, you may need to obtain local or state business licenses for your SMLLC. Among other possibilities, these might include licenses related to:

  • your profession or occupation
  • specific goods or services you’ll sell or provide
  • an assumed or fictitious name for your business, or
  • health and safety matters.

7. No Annual Reports

Unlike most other states, Ohio does not require LLCs to file annual reports.

For more information on SMLLCs, see the Single-Member LLCs  section of Nolo's website or Nolo's Guide to Single-Member LLCs, by David M. Steingold.

 

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